CalPERS & CalSTRS: an election you get to make

If your ex is a CalPERS or CalSTRS member, you — the non-member spouse — have a decision to make, and under Family Code §2610(a)(3) the choice belongs to you. It's one of the most consequential elections in your entire divorce, and most people have never heard of it until our office sends the letter. (If the member is already retired, there is no election — the "already retired" format applies.)

Option 1 — Shared interest

The most common choice. Your share stays inside the member's account and piggy-backs on their raises and promotions. If the member was married for 20 years of service, you're entitled to 10 years — and under a shared interest, the value of those years can be calculated at the member's highest pay at retirement. Your benefit promotes when they promote. The trade-off: the system won't pay you directly until the member actually retires (though Gillmore rights are retained).

Option 2 — Account segregation

Your years of service are carved into your own separate account. You can commence benefits independently, on your own timeline — attractive if there's a big age gap or health concern. The trade-off: your benefit is frozen at the member's pay at dissolution. Every future raise and promotion becomes the member's separate property. Same 20-year example, very different formula — and if the raises are significant, the difference is large.

Option 3 — Cash out (read this twice)

Cashing out is really a sub-option of segregation: the system pays you the mandatory service contributions plus interest for your assigned years — but none of the employer-side value that a monthly benefit would include. In our experience the cash-out is worth roughly 13 cents on the dollar compared to a lifetime payment, and choosing it is almost always fiscally irresponsible absent extreme circumstances. We put that warning in writing to every client who considers it.

Already retired? CalSTRS has one more decision

On dissolution, CalSTRS treats the divorce as a "life event" that allows modification of the survivor benefit election — keep the existing election, modify to a "compound" election that matches the community property entitlement, or pick something else entirely. Costs are re-priced at your current ages, so a change can mean paying significantly more for less. This choice deserves real analysis, not a default.

Unless directed otherwise, our office protects the community interest — but the election is yours, and we make sure you understand it before anything is filed.

For the CalPERS-specific mechanics — Model Order A vs. Model Order B, Gillmore rights, and why shared interest is the reversible choice — read our deep-dive article.